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Texas: Taxes on new completions?

WingsOnWheels

Well Known Member
For those that have completed and registered their new builds recently (within the last couple of years), what has been your experience with any Texas state sales tax? I'm getting to that point and don't want a surprise.

Thanks,
 
I paid use tax to the Texas Comptroller on the cost of the kits from Van's as I purchased them. I live in the county so it was 6.75% vs. 8.25%.
 
Which county are you in? Do you have an LLC, or did you pay use tax for a private citizen?

So it sounds like I will have to pay tax on the fuselage and finish kits. I was concerned that they would tax the entire aircraft value.
 
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Which county are you in? Do you have an LLC, or did you pay use tax for a private citizen?

Comal County. No LLC, paid as a private citizen.

"Anyone who buys taxable goods and services that are stored, used or consumed in Texas from a seller who does not charge Texas sales tax owes Texas use tax." - https://comptroller.texas.gov/taxes/sales/use-tax.php

Above includes a link to the form to submit the use tax. After a lot of research, I was convinced that registering the aircraft in Texas triggered the Comptroller to check for payment of use tax and collect it with late fees, etc. YMMV.
 
Being proactive makes sense, much of my aircraft was purchased locally second hand, but for the two kits I bought from Vans that would apply
 
I thought Texas was one of the states where builders don't have to pay sales tax on their completed kit plane?
 
I have never heard of any of my friends that have completed their aircraft talk about having to pay any taxes. Believe me, they would have complained about it.
 
Actually, you are supposed to declare and pay tax on anything you buy over the internet tax free at the end of every year, Aircraft or not. I found this out a year before I finished mine. I called the comptrollers office and they told me to just pay for the previous years and there was no penalty. I went thru all my receipts and paid up and kept documentation in case anyone ever comes after me. There is a form you fill out and send with your check.
 
Texas taxes

You can buy or sell an airplane in Texas with no sales tax as long as it isn't from a company that can collect sales tax and you don't buy or sell more than 3 a year. Casual sale. Why would you pay sales tax on an airplane you built? How would you determine the value, parts, is your labor have a value?
 
Someone just asked this on Facebook today. I've owned 3 aircraft here in Texas and have never received anything from the controller on them however I read a case on the controller's website (I have it scanned somewhere) where a Texas pilot claimed he had bought a kit so it wasn't an airplane so he didn't have to pay taxes. They wanted to rake him through the coals anyway.

He then came back and said : if you're going to tax it as an airplane then as a CFI I don't have to pay the taxes. Good try. (BTW that's how I didn't have to pay for my plane) BUT the controller told him he was correct, let me see your Sales and Use Tax certificate !

When you read the law it says you have to be in possession of a Sales and Use Tax certificate when you buy the airplane, and he got it later. So he ended up paying taxes, plus penalties, plus the attorney he hired for the years it took to get this all settled.

Having said all of this, laws change regularly so I'd check with a good CPA, Attorney, or if you write to the Controller's office, make sure you get everything in writing and be sure you are specific in your questions ! Asking if a CFI doesn't have to pay taxes will get you a "no a CFI does not have to pay taxes", but if you don't get the Sales and Use certificate then that could turn into "Yes you have to pay as a CFI because you didn't have a S&U Tax certificate when you bought it.
 
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